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“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Carmax Inc. (NYSE: KMX)? Today, we examine the outcome of a five year investment into the stock back in 2020.

Start date: 01/16/2020
$10,000

01/16/2020
  $8,476

01/15/2025
End date: 01/15/2025
Start price/share: $94.70
End price/share: $80.28
Starting shares: 105.60
Ending shares: 105.60
Dividends reinvested/share: $0.00
Total return: -15.23%
Average annual return: -3.25%
Starting investment: $10,000.00
Ending investment: $8,476.48

The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -3.25%. This would have turned a $10K investment made 5 years ago into $8,476.48 today (as of 01/15/2025). On a total return basis, that’s a result of -15.23% (something to think about: how might KMX shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“All the opportunity in the world means nothing if you don’t actually pull the trigger.” — Sam Zell